STATE LAW

California:

The state has taken a major step to protect consumer privacy. The California Consumer Privacy Act of 2018 (AB-375), has been passed by the legislature. Whether this will impact nonprofit list rentals and exchanges remains to be determined.

On February 6th the Attorney General announced a $410,000 settlement with Giving Children Hope. The action resulted when the charity allegedly engaged in a misleading reporting scheme. The Attorney General specifically alleged the organization did not properly account for gifts in kind and as a result, overstated its program service.

Missouri:

Long time consumer protection lead counsel for the Attorney General’s office, Bob Carlson, has retired from state service and gone into private practice.

Missouri:

The former general manager of a major shopping area in North Kansas City filed a lawsuit claiming she was fired in retaliation for refusing a directive to use parking meter fees that ordinarily go to charity for the shopping district’s operating costs. The plaintiff in the lawsuit served in her capacity for a period of almost fourteen years.

New Hampshire:

A United Way affiliate was victimized when the former information technology vice president allegedly stole $6.7 million from the organization. According to the report, the individual created a fictitious sample list of clients, generated fraudulent invoices and passed his father off as a principal in a shell company he created. The defendant was charged with wire fraud.

Source: Nonprofit Times, February 19, 2019

New York:

Trinity Church in Manhattan was chartered in 1697. It recently has become the subject of an ethical concern and a book. The affluence of the church can be traced to a gift of 215 acres from Queen Anne in 1705. The real estate portfolio of the church now is valued at over six billion dollars. A Harvard lecturer is publishing a book entitled “The Wealth of Religions: The Political Economy Of Believing And Belonging.” The issue presented is whether churches deserve tax-exemptions and at the same time be free to build up wealth.

Source: New York Times, February 8, 2019

Pennsylvania:

The Attorney General announced legal action against University of Pennsylvania Medical Center for violating Pennsylvania’s charity laws. The essence of the petition is to force the medical facility to protect and promote the public interest ensuring that UPMC abides by its charitable obligations. (Commentary: This is not the first time a state has challenged a charitable hospital on the alleged failure to pursue a charitable mission by promoting accessibility to those who otherwise could not receive treatment. As a charitable institution, the hospital does not pay real estate taxes. Local government needs revenue –hence the pressure.)

Source: Attorney General Press Release

INDUSTRY NEWS

On February 4, 2019, GuideStar notified users that GuideStar and Foundation Center joined forces. The announcement goes on to state that it will now be operated under a single, new nonprofit organization called “Candid”. The announcement assured users that their subscriptions will not change.

A 9th Circuit case could spell future difficulties for nonprofit organizations. In the case of Robles v. Domino’s Pizza, LLC, the court determined that a website maintained by a commercial or even a nonprofit organization could qualify as a “place of public accommodation” under the American’s with Disabilities Act (ADA) and thus be subject to making reasonable accommodation to disabled persons accessing the site. Case law is just developing on this issue but organizations would be wise to look at their own situations now with an expectation that the news will only get worse.

Great Britain:

The Charity Commission is now dealing with a backlog of more than one hundred active investigations in Northern Ireland. The probes go back to the year 2014. The regulatory agency says the delays are being caused by the high number of complaints and low numbers of staff to address them.

Source: BBC News NI (North Ireland), January 31, 2019

Canada:

The government has withdrawn its appeal of the 2018 court ruling that quashed a section of the Income Tax Act limiting political activities of charities. The challenge to the restriction was by a small charity located in Ottawa, which argued that the section violated the Charter of Rights guaranteeing freedom of expression. This past July the court ruled that the provision had no force or affect. (Commentary: this represents a stark departure from charity law in the U.S., which prohibits political involvement by tax-exempt organizations.)

Source: CBC News, January 31, 2019

IRS

There is growing support to repeal a provision in the 2017 Tax Reform Law that applies a 21% tax on the value of fringe benefits provided by charities to their employees (for example, free parking) is growing. Along with it is optimism that this will be reversed.

Copilevitz, Lam & Raney, LLC

Copilevitz & Canter is a national law firm that has dealt with every state and federal law and regulator so we can perform services more effectively, quickly and affordably than general counsel. We represent tax-exempt organizations, professional fundraisers, commercial telemarketers and political callers in all aspects of First Amendment law. We are the nation's largest provider of state charitable fundraising registration services.